In the knowledge mining series, here is the next blog to give you a comprehensive view of our IDP solution. In our previous blog, we discussed how knowledge mining uncovers the latent insights in the unstructured data.
You must be aware of Intelligent Document Processing (IDP) specifically if you process tons of documents every day. You might even be looking for a perfect IDP solution that can intelligently manage your loads of documents and helps you decrease the process cycle time and ramp up your performance. By the end of this blog, you will understand how IDP changes the game for you and the impact IDP can make in your business. Let’s get into the details.
Why Intelligent Document Processing?
Document processing is extracting valuable information from documents and ingesting the extracted data into digital systems. This activity allows you to manage and execute critical business operations, such as purchasing, ordering, and payments.
For an instance, let’s take the online ordering process. When a customer places an order for a specific product, the order becomes a document. The manufacturing company coordinates the acquisition of raw materials, manufacturing of the product, and finally, the delivery of the product to the customer with an invoice to collect payment. Every process is carried out by passing documents from one department to another and from one party to another.
In this simple chain of events, failing to process data from the documents results in lost orders, no raw materials, no product, no delivery conditions, no invoice, and no payment, which can lead to a disaster. Data entry typos or incorrect data classifications can have the same impact on an organization as not processing documents. To ensure success, you must carefully consider every step of this operation is efficient and accurate, from document collection to data storage.
Document processing can be a critical contributor to your company’s long-term success. Automating this process intelligently provides opportunities to improve operational efficiencies to a greater extent. Thanks to Intelligent document processing, as it opens the door for new possibilities for enterprises accelerating the process cycles and improving the efficiency and accuracy of data extraction.
3 Important steps in Intelligent Document Processing
Here are the important steps that are involved in intelligent document processing. The accuracy of each step contributes significantly to the end result.
Most businesses receive documents from various sources, such as email, productivity apps, and possibly even a faxing service. Before you can collect data, a person, team, or software solution must classify each document so that the information contained within it is routed to the appropriate systems. IDP can sort documents and enables early document validation, which is especially important when checking the legibility of data.
Data capture is the most expensive, time-consuming, and resource-intensive step in document processing. If you manually enter data into your business systems or use a traditional optical character recognition (OCR) system, you should calculate the total cost of your current approach.
As you investigate the data extraction stage, you may notice how the data quality affects other aspects of your business. When processing invoices, for example, you want accurate and timely data entry to ensure stable vendor-customer relationships and to present opportunities to save production costs through early payment discounts. These savings may enable you to charge a more competitive price for your goods or services. To ensure precise data capture, you can integrate an IDP solution into your business systems.
The validation stage of document processing can easily fall by the wayside when using manual data entry. While some specialists may double-check their work as they enter it, most see this as adding to the monotony of typing or copying data into a spreadsheet, accounting software, or enterprise resource planning (ERP) system.
On the other hand, an automated IDP platform isolates data validation, giving it a higher sense of value. With continued use, AI learns to understand new document formats, bringing it closer to automating your entire document processing procedure.
Hassle-free invoice processing with IDP
With technological advancements, hands-free invoice processing is now possible, reducing the number of human touchpoints throughout the Accounts Payable (AP) process. Invoice automation, according to many enterprises, is digitizing invoices. However, digitization alone is insufficient to address the complexity and variability of processes required to receive, validate, and process invoices. Businesses miss focusing on the brighter aspects like faster automation speeds, shorter payment cycle times, and cost savings.
Metrics like optical character recognition (OCR) accuracy rates and the percentage of electronic documents cover only a portion of the journey to invoice automation. Deeper integration into source procurement and accounting systems help to access critical data and documents for validation and analysis. This access, combined with AI, intelligent workflows, and analytics, enables new levels of automation to drive efficiencies and accuracies.
Avoid invoice processing challenges
Almost 33% of businesses want to shorten invoice processing terms to take advantage of cash management programs.
Mismatches are caused by various factors, some of which are caused by supplier billing processes and systems and others by the purchasing process itself. Intelligently dealing with mismatches through automation can cut weeks off the invoice processing cycle time. IDP solution with built-in AI can drive higher autonomous match rates are examples of typical invoice mismatches that automation can address.
The IDP solution uses machine learning (ML) to train their AI model to outperform a simple rules-based engine. Cloud-based solutions leverage their entire customer base, so their AI engines are intelligent immediately, reducing overall training time.
What happens when there is a mismatch/ issue that needs immediate attention?
When an invoice is found that does not match an order, the IDP solution autonomously runs through scenarios to attempt a more sophisticated match. For example, an invoice that breaks out a single order line item into multiple line items would typically never generate a match. An intelligent matching engine could understand that many lines add to a single order line item and flag the invoice as a match.
There are scenarios like utility bills and taxes where it is uncommon to have an order or other purchasing documents. In these cases, the IDP solution can analyze the contracts and spend categories to learn specific vendors where no match is needed to generate an OK-to-pay. AI Identification and automated account coding for no-process order invoices will reduce the need for manual processing. Intelligent workflows provide a backstop to quickly resolve issues when smart matching cannot guarantee a match.
Deeper understanding of the invoice documents:
Intelligent workflows leverage an understanding of the most likely issues and who within the organization is the best equipped to solve the problem.
- Example 1 – the AI matching engine determines that the line description on the invoice is similar but needs human validation of the match. The workflow engine would route this to the person who raised the order, as they would be most familiar with what was purchased.
- Example 2- In a different case, the problem may be a mismatch in taxes. The document would instead be routed to the correct person or system in finance to validate the correct amount.
In both of the examples, the solution would highlight the suspected problem on the document allowing the problem to be triaged quickly. Furthermore, the IDP solution can understand what is wrong with the invoice and who the correct person is to solve the problem. Getting the invoice to the right person is vital to keep processing cycle times as low as possible.
Intelligent workflows free the organization from building less effective standard workflows that could not consider the fastest route to solve the problem.
Enterprises have started to adopt IDP. While this shift helps companies achieve digital transformation faster, many companies may not know what to do and where to start. We are here to help you figure out what is best for your business and if you already have a use case, we can provide you with the tailored solution.
How can we help you?
Check out our DigitalClerx, where you can choose the expert of your choice according to your business needs.
Meet our Collection Specialist – Emma.
She specializes in invoice processing and makes your invoice processing simple and quick.
We have a range of specialists who can help you simplify your processes. Here are our other DigitalClerx team members.
How to get started?
- Select your specialist
- Try before you hire
- Onboard your enterprise digital assistant